The lightening speed of technological innovation has been surpassing the slower but steady wheels of change in law and regulation for some time. This might now be coming to an end – and such a change may bring important consequences to leaders of innovation and technology. The law and its regulations reflect historic community expectations of fairness and due process. Law is in effect a lagging indicator of social beliefs. When society changes quickly, the structures of law and justice can easily be stretched – resulting in barriers to innovation.
Take for instance Uber. Where this innovation has achieved success, it has done so hand in hand with regulatory change. There was no room or time for regulation to be a lag indicator. Success required simultaneous change in regulation. Much has been said regarding the Uber phenomenon – but perhaps one area not fully recognized is that one key to Uber’s success, as with many other technological innovations in recent years, has been the ability to progress extremely rapid legal change simultaneously with technical innovation. In short – technology leaders must now recognize that breakthrough technological innovations require, hand in glove, legal innovation.
Three-dimensional printing of human organs, driverless cars, widespread use of drones, genetic manipulation of embryos, super computers with access to almost unimaginable power in cloud based mega data analytics, round the clock video and sound surveillance, and the trans-nationalization of all forms of technical innovation are clear and present challenges to domestic legislators. Governments are simply too often stretched to respond creatively and pro-actively. If technology leaders want to truly succeed in a future in which governments struggle to understand the broad ranging consequences of innovation, they must adapt skills of persuasion and support for regulatory adaptation. They may perhaps even need to have legislative teams that can prepare and comprehensively think through the legal change that may be necessary.
Indeed, one might now argue that a core competency of the technology leaders of the future will be their ability to support and possibly even drive government regulatory change management efforts along with the change management of innovative systems. What might this look like? Well, Uber is one model of success where it is partnering with government to manage regulatory change. Rather than turning to lawyers on a selective basis for intellectual property advice, or contracting support, technology leaders should now work with their lawyers to envisage where regulatory barriers for future products are outdated, and work to lead regulatory change to open new markets. Governments are certainly not against change, but they may lack a capacity to understand the potential of technological innovation and through foresight analysis drive regulatory innovation for future industries.
When you plan for your annual budget and organizational structure, spend time considering your pipeline of products and the regulatory change that will be required to fully implement them. A major defense contractor is beginning to commercialize hybrid airships to move heavy equipment across difficult terrains. Their operation will require legislative change in every country in which they aim to sell and operate these vehicles. Their critical path is now, in large part, regulatory change in each target country. In essence, regulatory innovation will be essential precursor for this product in the market. Lawyers may now be as essential to technological innovation as the engineering teams of the future.
Lawyers are traditionally considered when a dispute is in sight, or a contract needs drafting. In more limited circumstances lawyers are brought in to advice on regulation. Rarely however, have lawyers been brought in to bring foresight, and strategic planning about the range of possible options of future regulatory regimes – the very regimes that will define the terrain of future corporate activity. This area of planning and strategic forward agenda for corporate innovation is the regular terrain of MBAs and engineers, or perhaps for in-house counsel. In an age of such rapid change, the role of expert external lawyers – and the understanding of the skills those lawyers will bring to strategy development and operational role-out, must change as well.
In addition, technology leaders would do well to regularly create true multi-party public/private partnerships and workshops to envisage regulatory change for the future, without the immediate self interest of specific regulatory reform. This can lead to unexpected new opportunities. For example, governments such as Myanmar, PNG, Mozambique, Bolivia or Mongolia will all have a stake in the trans-national regulatory developments of the future – but many of these countries have extremely limited governmental budgets – squeezing their ability to respond creatively. Industry associations that have independent credibility can assist the rapid “leap-frogging” of regulatory agenda’s in these countries to create entire new markets for technology innovators. Africa has been transformed by cell phone access, leap-frogging over land-based phone systems. Many African countries did it again through innovative electronic banking. Rapid change in the poorest parts of the world is therefore proven and probable. But continued success, in a world of rapidly escalating technological change, requires rethinking engagement (and support) with government.